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December 2013

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When EDI is Accessible and Proportionally Affordable, Plan to Produce

When EDI is Accessible and Proportionally Affordable, Plan to Produce

In case you were in doubt, being asked to provide “easily accessible” digital records of thousands of paper documents you already produced may not be considered unreasonably cumulative, duplicative or burdensome, and if the related costs are something like .025% of the amount in controversy, well, it’s probably time to back up the virtual truck, provide the data and cut a check.

U.S. Magistrate Judge Michael A. Hammer in New Jersey reached this conclusion in a breach of contract case where the defendant requested a protective order relating to 67 keyword searches of its data. Juster Acquisition Co., LLC v. North Hudson Sewerage Authority, 2013 U.S. Dist. LEXIS 18372 (D.N.J. 2013). Saying it already produced 8,000 printed pages of material to the plaintiff, the defendant felt it had already satisfied the plaintiff’s request. The defendant also asked that the court direct the plaintiff to pay for digital searches, which the defendant said were broad and vague -- therefore the information was not easy to get.

Magistrate Judge Hammer said the defendant failed to comply with Fed.R.Civ.P. 26(c)(1), which requires the moving party to establish that it conferred in good faith, or at least tried to work with the other side to resolve the dispute. Because the defendant failed to do this, the court denied its request for a protective order.

In asking the court to shift the cost of hiring an e-discovery vendor to the plaintiff, defense counsel complained that this was “one of the most document-intensive cases that the firm has ever encountered,” pointing to the thousands of paper documents it already produced. In rejecting this argument, M.J. Hammer cited the general assumption that parties pay their own discovery costs as outlined in the landmark Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, 283 (S.D.N.Y.2003), and that the responding party has the burden of proving that cost-shifting is warranted.

Cost-shifting should only be considered when electronic discovery imposes an undue burden and expense on the producing party, such as when “inaccessible data” is being pursued, the court said, further relying on Zubulake. The precedent goes on to say that, thanks to search engines, “any data that is retained in a machine readable format is typically accessible.” The Zubulake court said “active, online data, near-line data, and offline storage/archives” are typically accessible, whereas “backup tapes and erased, fragmented, or damaged data” are typically inaccessible. After further review of the facts, M.J. Hammer said the defendant did not demonstrate the requisite burden. The defendant “seeks merely to avoid the cost associated with what it presumes to be duplicative and expensive word searches. The court went on to describe other reasons not to shift costs, among them being proportionality. The cost of the effort will be less than $16,000, the court noted, whereas the amount in controversy in the case is $41 million.

If we may, regarding the protective order sought by the defendant, M.J. Hammer effectively said “you can’t touch this.” (Apologies to the magistrate judge.)

Key Takeaways

- Broad and vague doesn’t necessarily mean inaccessible.

- Paper document sets are simply not the same as their digital twins.

- If you feel you’re facing a burden, confer with the other side before going to the court.

- If the cost of production is dwarfed by the amount of money you’re being sued for, don’t expect the court to hand your opponent the bill.